Room Tax

[Bob1485]

We own a rental in Wisconsin, near the Wisconsin Dells. Airbnb states the following in their Rules for Hosts titled "Occupancy tax collection and remittance by Airbnb in Wisconsin" (https://www.airbnb.com/help/article/2337😞

Guests who book Airbnb listings that are located in the State of Wisconsin will pay the following taxes as part of their reservation: 

• Sales Tax: 5% of the listing price including any cleaning fees and guest fees for reservations 29 nights and shorter in Wisconsin. For detailed information, visit the Department of Revenue's website.
• County Tax: 0.5% of the listing price including any cleaning fees and guest fees for reservations 29 nights and shorter in certain counties. For detailed information, please visit the Department of Revenue's website.
• Local Exposition Taxes: Basic Room Tax: 3% of the listing price including any cleaning fees and guest fees for reservations 29 nights and shorter in Milwaukee County; Additional Room Tax: 7% of the listing price including any cleaning fees and guest fees for reservations 29 nights and shorter in the City of Milwaukee. For detailed information, please visit the Department of Revenue's website.
• Premier Resort Area Tax: 0.5% of the listing price including any cleaning fees and guest fees for reservations 29 nights and shorter in the City of Rhinelander, Village of Ephraim, Village of Sister Bay, Village of Stockholm, City of Eagle River, and City of Bayfield; 1.25% of the listing price including any cleaning fees and guest fees for reservations 29 nights and shorter in the City of Wisconsin Dells and Village of Lake Delton. For detailed information, please visit the Department of Revenue's website.
• Local Room Tax: All locally imposed Room Taxes will be collected on reservations in Wisconsin. The tax varies by city and county. It is typically 0-10% of the listing price including any cleaning fees and guest fees for reservations 29 nights and shorter. For detailed information, please visit your local finance department website.

The relevant taxes for our listing (based on its location) are the Sales Tax (5%), County Tax (0.5%), and Local Room Tax (0-10%).  Airbnb is currently only collecting the Sales Tax and County Tax, even though their Rules state they will collect the Local Room Tax as well.  We were recently informed by our Township, that the Local Room Tax was not being collected (it is 5% for our area) - and so we had to pay it out of pocket!   

I informed Customer Service of this issue and keep getting the same response. 

1. I can set up Custom Taxes, collect it as part of the payment from Airbnb, and remit the tax payments myself. 
   1. Why would Airbnb state they will collect these taxes and remit them to the proper authorities, when that is in fact not the case?  
   2. If they state this will happen, then that's our expectation - I don't want to create a custom tax, I want Airbnb to do what they said would happen
2. Or I can, "collect a tax outside of what Airbnb collects, you would be responsible for doing so either through the Resolution Center, or in person at check-in. Just be sure to have any additional taxes clearly explained in your listing description so guests are aware prior to booking." 
   1. This option doesn't make sense to me - they're saying that I should identify this additional tax in my listing's description.  The potential renter would get the pricing from Airbnb for the period they want to book our rental (which wouldn't include this 5% room tax), and then after they book the listing, I would charge them an additional 5% - either through the dispute resolution portal or directly from the renter (because I disclosed it in my listing).  
   2. I think this would cause many cancellations because of lack of transparency in the pricing.  This is not a viable business model and could seriously harm our reputation and revenue.
   3. We also have instant booking (based on Airbnb's recommendations) - so I wouldn't be able to add an additional 5% tax to the total price before they book the listing.  It would have to occur after they finish booking - and again, just because I could disclose it in my listing's description, I would then go back to the customer and ask them for additional money - makes no sense.
   4. Airbnb states they will collect and remit these taxes on our behalf in their Rules.  Yet, now they're saying they do not and we have to do it ourselves - how does that make any sense?

Is anyone else having this issue and how do we get it resolved?  All I want is for Airbnb to collect the additional Room Tax and remit it to the proper authority - just as their rules state they will.  

[Joan2709]

Hi @Bob1485 

If Airbnb said they were responsible for collecting local lodging taxes, but didn’t, it might be an uphill battle to resolve this. Unfortunately, if a tax is required, but not collected on your previous bookings, you will still owe the tax (as you discovered). See another thread on this issue:

Getting Airbnb to Add a New Local Lodging Tax

https://community.withairbnb.com/t5/Help-with-your-business/Getting-AirBnB-to-add-a-new-local-lodgin...

Looks like you have been hosting for just over a year? We always suggest new Hosts keep their own spreadsheet of every reservation and breakdown all the taxes (sales & lodging) by jurisdiction in case it’s needed. This will help you verify if Airbnb is calculating taxes correctly and immediately spot if a specific tax is not being collected. This will enable you to avoid unpleasant surprises come tax time. Unfortunately, this might be an uphill battle for you with Airbnb. Other Hosts have connected with their local taxing authority and with Airbnb to determine what is required for this to be remedied properly.

Airbnb groups all taxes (sales tax/lodging tax) under the heading "Occupancy Taxes" in a reservation. You will have to do the math on your spreadsheet and breakdown sales tax and lodging tax for each jurisdiction that applies to determine if the amount is correct:

You can see what taxes are currently being withheld (but not the specific percentage breakdown) by going to:

- Listing

- Policies & Rules

- Laws & Regulations

- Taxes

In the mean time, I would suggest adding a custom tax to your listing, so at least the tax will be collected on reservations until Airbnb corrects this. It doesn’t matter if you have Instant Book, as it should appear correctly on any reservation. Be sure you monitor every reservation and use your spreadsheet. This will allow you to remove the custom tax once it has been corrected by Airbnb. Be aware that since it is a custom tax, you will be paid the tax and are responsible for then remitting it to the local tax authority; not Airbnb. This will require coordination so you are not taxing the guest twice for the local lodging taxes. I believe you need to have Pro Tools turned on (Account Settings) in order to add a custom tax.

How to Add Taxes to a Listing

https://www.airbnb.com/help/article/2523

After adding the custom tax, it should appear as "Property use taxes" on your reservations:

Let us know here how it goes as many other Hosts experiencing similar problems. It's not being discovered until tax time (year end) unfortunately.